IMTK From ADVFN9 Sep 2018 13:34
gimmetheloot 9 Sep '18 - 12:00 - 5 of 7Moderate | Ban
1.000 0 0
Brilliant Keya;
The following news is exactly what Vin Murrai was talking about when she was talking on share prophets.
I took it off another LSE listed company.
On the corporate side, where we spend our time analysing balance sheets and share prices, the continuation of share buybacks accelerated. There is nothing inherently wrong with buy backs. In fact a share buy back can be one of the most effective tools for increasing shareholder value. When the shares of a publicly traded company are selling at a discount to their intrinsic value and the company is generating free cash flow the highest and best use of capital may indeed be reducing the shares in issue. Sadly, we are not seeing much of that. What we are seeing is well paid managers, who own very little of the company they manage, spending shareholder's funds to purchase shares at or near all-time highs (Earnings multiple and share price). This has the effect of increasing earnings per share in the short term and thus often triggering bonus packages for management that further takes more capital out of the company. This capital may well be needed in the future. In many cases shareholders fail to notice that their employees with very little skin in the game, are making decisions that maximise their compensation while they have little or no exposure to future downside. This lack of skin in the game is rapidly becoming a threat to long term shareholders and will become readily apparent at the first economic downturn or financial crisis. It also continues completely unchecked in an environment where individual securities are purchased largely because of the money pouring into passive funds. With this market dynamic as a framework, poor decisions can be rewarded as long as the index continues to attract net capital flows.
3 points to highlight;
1. Lack of skin in the game. Vin Murrai has a lot of that by taking £2M companies to half a Billion plus. This woman is a serial winner.
2. Poor decisions, VM is the Queen of tech, made massive gains in numerous companies. Lots of companies directors using AIM companies funding a lifestyle
3. Buying the companies own shares. Vin Murrai putting in £500k.
Please copy & paste on LSE!!
Hoping for a cracking week ahead
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